Canada joins the US and Europe trade war against China, announcing that it will impose 100% tariffs on Chinese electric vehicles from 1 October. A measure adopted in response to the strong competition from the Asian giant in electric cars and which will affect all vehicles imported from that country, including those manufactured by the American Tesla there, and which will be added to the current tax of 6.1%.
The Government that leads Justin Trudeau has chosen to follow in the footsteps of the US and Europe, although he has leaned more towards the model of the former. Remember that the country he presides over Joe Biden opted to impose 100% tariffs on electric vehicles imported from China. Meanwhile, in the European Union Smaller tariffs were set last July, but have recently been revised (some up, some down – for example, those affecting Tesla-) and they could still be subject to changes because they will not come into force until they are published in the Official Journal of the EU… and there is a deadline until next October 30th.
Although China is Canada’s second largest trading partner, Trudeau had been mulling the new tariff for some time, having opened a 30-day public consultation period at the end of June. He has now given it shape by setting it at 100% as of October 1, in an attempt to deal with the strong competition of the Asian giant’s electric vehicles, a competition that they consider unfair and that is partly reflected in the value of these importswhich have gone from 100 million dollars (89.7 million euros at the current exchange rate) in 2022 to 2.2 billion dollars (1.974 billion euros) in 2023, according to data from Statistics Canada collected by Ok Diario. Likewise, the measure seeks to protect the Canadian automotive industry, which has more than 125,000 direct jobs. In addition, soon, within a month, it will also be decided to impose additional taxes on imports of batteries and their components (including semiconductors) from China.
The Trudeau government is not only criticising the Asian giant’s subsidies and aid to its companies, but also “China’s intentional, state-directed policy of overcapacity and lack of rigorous labour and environmental standards.”
The Trudeau government is not only criticizing the Asian giant’s subsidies and aid to its companies, but also “China’s intentional, state-directed policy of overcapacity and lack of rigorous labor and environmental standards threaten workers and companies in the electric vehicle industry around the world.” Of course, the strong competition from the Asian giant is not the only thing affecting the electric car and influencing the slowdown it is experiencing worldwide, but there is also the weak demandlas ineffective aids (or even its lack and cancellation) and the high costs This is not only a problem for customers, but also for the car manufacturers. In fact, the latter are having difficulties in making this vehicle profitable and that is why they have slowed down their plans and continue to rely on combustion engines (petrol and diesel) and hybrids, as has been seen recently in Fordwhich has cancelled production of the electric SUV model because “it is not profitable to produce it”.
As for aid, Canada is also considering limiting the amount it gives for the purchase of zero-emission vehicles and for the installation of charging infrastructure for products manufactured in countries with which it has free trade agreements. It is worth noting what has happened in Germany: Since December 17, when aid for the purchase of electric cars was eliminated, sales have fallen significantly.
Of course, Canada has also raised its pulse against competition from the Asian giant beyond the automotive sector. In fact, it is going to impose tariffs of 25% on products from aluminum and steel to be imported from there from mid-October.
And be careful, because within this new step of the trade war, China is expected to respond. So far, it has already denounced the European tariffs to the World Trade Organization (WTO) and has set its sights on some of the European products it imports, such as pork (something that particularly affects Spain), brandy… and now also dairy products.
